Samsung Pay uses two technologies that allow it to work almost anywhere. The first is near-field communication (NFC) for tap-to-pay transactions at contactless terminals. The second is magnetic secure transmission (MST) for older terminals where you would normally swipe a card. The phone emits a magnetic signal to simulate the magnetic strip found on the back of a credit or debit card when you hold the phone against one of these readers.
In 2015 Samsung acquired mobile payment company LoopPay, which developed the specific MST technology used for Samsung Pay.
Starting with the Galaxy S21, new Galaxy phones released in the US will no longer support MST. "Due to the rapid adoption of near field communication (NFC) technology by consumers and businesses, beginning with devices launched in 2021, Samsung Pay will focus its support on NFC transactions, across the Galaxy portfolio. While future devices will no longer include magnetic stripe technology (MST), customers with previous, compatible Galaxy devices will be able to continue using Samsung Pay, including MST," Samsung said in a statement to CNET.
Owners of phones released in 2020 and earlier, such as the S20 FE, Note 20 Ultra and Z Fold 2, will still support MST in Samsung Pay